State Bank of India (SBI), India’s largest lender, has made it easier for home loans of other banks to swiftly flow into its books.

Last week, the bank issued a circular to its branches giving them leeway in processing switchover loans, or loans that customers have already availed from other banks and wish to switch to SBI.

Banks are generally not proactive in handing over title deeds when a customer wants to switch over to another lender. The customer needs to submit a third-party guarantee or another security until the old bank transfers the title deed. This switchover process may take up to a month in some cases.

“We have made some modifications in the takeover norms. Discretion has been given to some senior officers and regional managers to waive the stipulation of the interim security,” said a senior SBI official. He said the leeway is subject to conditions: There should be a gap of at least two years from the date of first disbursal, the housing project should be complete and the conduct of the account should be satisfactory.

SBI recently waived off 50% of the processing fees and is offering home loans up to Rs 30 lakh at 10%. “The demand for home loans has nearly doubled post these offers,” said the official.
Switchover loans bring special advantage to lenders.

“After two years, the risk of completion of project is taken care of. Typically, the borrower’s income also increases, thereby improving loan servicing capacity,” said Harsh Roongta, CEO of Apnapaisa.com, a personal finance portal.

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